Organizations operating or advocating for ACOs hailed the overall results but urged changes to the programs.

The Medicare Shared Savings Program (MSSP) is the federal government’s flagship ACO program and includes more than 90 percent of all Medicare ACOs.

A key performance aspect—and a central goal of many providers that launch ACOs—is to reduce spending and improve quality enough to earn shared savings under the program.

In 2016, 134 out of 432 ACOs, or 31 percent, generated more than $700 million in shared savings, according to
data from the Centers for Medicare & Medicaid Services (CMS). That year was the first since the MSSP started in which the percentage of ACOs with shared savings did not increase. ACOs with shared savings had steadily increased from 26 percent of the 220 ACOs in the combined first payment years of 2012 and 2013,
to 31 percent of the 392 ACOs in 2015.

“This is hard stuff; it’s not easy to get the culture change and the behavior change you need at the ground level and across the board, and it just takes time,” said Jeffery Spight, president of Collaborative Health Systems, which helps operate ACOs. “A lot of the ACOs are still getting some
traction and learning how to do this.”

The vast majority of MSSP ACOs participated in Track 1, which has only upside risk, with a smaller number in Track 2 and Track 3, which include downside risk. In 2016, no Track 2 ACOs had shared losses, but four Track 3 ACOs did, according to the recent CMS data.

Big differences emerged in the types of ACOs that were most likely to generate shared savings. The 134 physician-only ACOs were the most likely (45 percent did so), while the 226 hospital ACOs were the least likely (23 percent).

New Benchmark
Approach

Importantly, ACOs renewing in 2016 had their spending performance measured against a rebased benchmark, which included an adjustment for prior savings.

Fifty-nine percent of renewing ACOs received such an adjustment, which averaged $197, according to CMS. But ACOs that fell short of savings or that were trending in the wrong direction had, on average, much larger dollar-amount changes in their benchmarks compared with ACOs that either
garnered shared savings or were trending toward such an accomplishment.

Although Spight downplayed the role of the benchmark reset, which CMS implemented for the longest-running ACOs (those that launched in 2012 and 2013), the Medicare data showed that shared savings stagnated among those older ACOs while increasing among newer ACOs.

Among ACOs launched in 2012, 42 percent generated shared savings in both 2015 and 2016. Among ACOs launched in 2013, the percentage with shared savings decreased from 37 percent in 2015 to 36 percent in 2016. Meanwhile, among the 100 ACOs that launched in 2014, the proportion with shared
savings increased from 22 percent in 2015 to 36 percent in 2016; and among the 85 ACOs launched in 2015, the percentage with shared savings increased from 21 percent in their inaugural year to 26 percent the following year, according to CMS data.

Benchmarking obscures the progress that the ACO program has stimulated, Spight said in an interview. “The practices we work with are better practices today than they were four years ago, and that’s impacting all of their other lives: their commercial lives, their Medicare Advantage lives, and
their Medicaid lives,” he said. “You’re seeing how they practice changing for everybody.”

In quality-related tracking, 330 of the 428 ACOs subject to pay-for-performance measures earned an average quality score of 94 percent. The remaining 98 ACOs received a quality score of 100 percent since they were in pay-for-reporting status.

CMS highlighted that of the MSSP ACOs that fell short of qualifying for shared savings, 107 (25 percent) were “trending positive” in 2016, marking an increase of four percentage points from the prior year.

The highest-performing ACOs fared notably better in spending compared to the worst-performing ACOs. For example, ACOs with shared savings were able to cut inpatient hospital spending by 5 percent compared to their benchmark, while costs for the worst-performing ACOs increased by 8.6 percent.

Similarly, total Part B physician spending was 0.2 percent higher than the benchmark for ACOs with shared savings, and 7.4 percent higher for the worst-performing ACOs.

Big utilization differences also emerged, with shared savings ACOs cutting skilled nursing facility days by 21.5 percent compared to their benchmark, compared with an increase of 10.3 percent for the worst-performing ACOs.

The much-smaller Pioneer and Next Generation ACO programs earlier reported much better results. Six of eight
Pioneer ACOs and 11 of 18
Next Generation ACOs earned shared savings in 2016, according to CMS data.

The Pioneer program launched in 2012 with 32 ACOs and ended in 2016 with eight, while 2016 was the first operational year for the Next Generation ACO program.

The Next Generation ACOs—unlike those in MSSP Track 1—all face two-sided risk. The best-performing Next Generation ACO garnered more than $12 million in shared savings, while the worst-performing had more than $6 million in losses.

Overall, Medicare ACOs generated $836 million in savings and provided Medicare with net savings of $71.4 million in 2016.

Changes Urged

For instance, in a
statement, Premier urged CMS to “address antiquated policies that impede success and innovation to allow providers participating in APMs [alternative payment models] additional opportunities for cost and quality improvement in order to ultimately better serve their patients.”

The National Association of ACOs (NAACOS) recommended that CMS modify its approach to risk adjustment and make changes to ACO benchmarking.

“These results show the growing success of ACOs, which is a positive trend that should not be ignored,” Clif Gaus, president and CEO of NAACOS, said in a
written statement. “A lot has been accomplished in a relatively short amount of time, and ACOs are on the front line of redesigning healthcare delivery. This is a moment to celebrate them and their hard work.”

Other Changes

“Thus, the pressure to somehow bend the healthcare cost curve won’t go away—it will grow—and ACOs, which were actually introduced as a concept by Republicans during the George W. Bush administration, will continue to be the lead dog in the pack of value-based care initiatives,” Perez said. “In
the future, ACOs should benefit from the Trump administration’s expected easing of reporting requirements and allowing of more waivers of fee-for-service rules.”

Spight has urged changes to how risk adjustment is applied to MSSP ACOs.

“It obscures some of the real results and the real performance,” Spight said. “If your risk adjustment is going to move 2 or 3 percent, that can overwhelm any performance results that you had or can make it harder to pull it apart.”

Specifically, the current approach to risk adjustment obscures the success of many ACOs in reducing utilization, Spight said.

The use of prospective assignment of beneficiaries can compound impacts from risk adjustment.

“Most of their performance is hiding what they’ve actually gotten done because of how the assignment works and how the risk adjustment is applied,” Spight said.

Organizations operating or advocating for ACOs hailed the overall results but urged changes to the programs.

The Medicare Shared Savings Program (MSSP) is the federal government’s flagship ACO program and includes more than 90 percent of all Medicare ACOs.

A key performance aspect—and a central goal of many providers that launch ACOs—is to reduce spending and improve quality enough to earn shared savings under the program.

In 2016, 134 out of 432 ACOs, or 31 percent, generated more than $700 million in shared savings, according to
data from the Centers for Medicare & Medicaid Services (CMS). That year was the first since the MSSP started in which the percentage of ACOs with shared savings did not increase. ACOs with shared savings had steadily increased from 26 percent of the 220 ACOs in the combined first payment years of 2012 and 2013,
to 31 percent of the 392 ACOs in 2015.

“This is hard stuff; it’s not easy to get the culture change and the behavior change you need at the ground level and across the board, and it just takes time,” said Jeffery Spight, president of Collaborative Health Systems, which helps operate ACOs. “A lot of the ACOs are still getting some
traction and learning how to do this.”

The vast majority of MSSP ACOs participated in Track 1, which has only upside risk, with a smaller number in Track 2 and Track 3, which include downside risk. In 2016, no Track 2 ACOs had shared losses, but four Track 3 ACOs did, according to the recent CMS data.

Big differences emerged in the types of ACOs that were most likely to generate shared savings. The 134 physician-only ACOs were the most likely (45 percent did so), while the 226 hospital ACOs were the least likely (23 percent).

New Benchmark
Approach

Importantly, ACOs renewing in 2016 had their spending performance measured against a rebased benchmark, which included an adjustment for prior savings.

Fifty-nine percent of renewing ACOs received such an adjustment, which averaged $197, according to CMS. But ACOs that fell short of savings or that were trending in the wrong direction had, on average, much larger dollar-amount changes in their benchmarks compared with ACOs that either
garnered shared savings or were trending toward such an accomplishment.

Although Spight downplayed the role of the benchmark reset, which CMS implemented for the longest-running ACOs (those that launched in 2012 and 2013), the Medicare data showed that shared savings stagnated among those older ACOs while increasing among newer ACOs.

Among ACOs launched in 2012, 42 percent generated shared savings in both 2015 and 2016. Among ACOs launched in 2013, the percentage with shared savings decreased from 37 percent in 2015 to 36 percent in 2016. Meanwhile, among the 100 ACOs that launched in 2014, the proportion with shared
savings increased from 22 percent in 2015 to 36 percent in 2016; and among the 85 ACOs launched in 2015, the percentage with shared savings increased from 21 percent in their inaugural year to 26 percent the following year, according to CMS data.

Benchmarking obscures the progress that the ACO program has stimulated, Spight said in an interview. “The practices we work with are better practices today than they were four years ago, and that’s impacting all of their other lives: their commercial lives, their Medicare Advantage lives, and
their Medicaid lives,” he said. “You’re seeing how they practice changing for everybody.”

In quality-related tracking, 330 of the 428 ACOs subject to pay-for-performance measures earned an average quality score of 94 percent. The remaining 98 ACOs received a quality score of 100 percent since they were in pay-for-reporting status.

CMS highlighted that of the MSSP ACOs that fell short of qualifying for shared savings, 107 (25 percent) were “trending positive” in 2016, marking an increase of four percentage points from the prior year.

The highest-performing ACOs fared notably better in spending compared to the worst-performing ACOs. For example, ACOs with shared savings were able to cut inpatient hospital spending by 5 percent compared to their benchmark, while costs for the worst-performing ACOs increased by 8.6 percent.

Similarly, total Part B physician spending was 0.2 percent higher than the benchmark for ACOs with shared savings, and 7.4 percent higher for the worst-performing ACOs.

Big utilization differences also emerged, with shared savings ACOs cutting skilled nursing facility days by 21.5 percent compared to their benchmark, compared with an increase of 10.3 percent for the worst-performing ACOs.

The much-smaller Pioneer and Next Generation ACO programs earlier reported much better results. Six of eight
Pioneer ACOs and 11 of 18
Next Generation ACOs earned shared savings in 2016, according to CMS data.

The Pioneer program launched in 2012 with 32 ACOs and ended in 2016 with eight, while 2016 was the first operational year for the Next Generation ACO program.

The Next Generation ACOs—unlike those in MSSP Track 1—all face two-sided risk. The best-performing Next Generation ACO garnered more than $12 million in shared savings, while the worst-performing had more than $6 million in losses.

Overall, Medicare ACOs generated $836 million in savings and provided Medicare with net savings of $71.4 million in 2016.

Changes Urged

For instance, in a
statement, Premier urged CMS to “address antiquated policies that impede success and innovation to allow providers participating in APMs [alternative payment models] additional opportunities for cost and quality improvement in order to ultimately better serve their patients.”

The National Association of ACOs (NAACOS) recommended that CMS modify its approach to risk adjustment and make changes to ACO benchmarking.

“These results show the growing success of ACOs, which is a positive trend that should not be ignored,” Clif Gaus, president and CEO of NAACOS, said in a
written statement. “A lot has been accomplished in a relatively short amount of time, and ACOs are on the front line of redesigning healthcare delivery. This is a moment to celebrate them and their hard work.”

Other Changes

“Thus, the pressure to somehow bend the healthcare cost curve won’t go away—it will grow—and ACOs, which were actually introduced as a concept by Republicans during the George W. Bush administration, will continue to be the lead dog in the pack of value-based care initiatives,” Perez said. “In
the future, ACOs should benefit from the Trump administration’s expected easing of reporting requirements and allowing of more waivers of fee-for-service rules.”

Spight has urged changes to how risk adjustment is applied to MSSP ACOs.

“It obscures some of the real results and the real performance,” Spight said. “If your risk adjustment is going to move 2 or 3 percent, that can overwhelm any performance results that you had or can make it harder to pull it apart.”

Specifically, the current approach to risk adjustment obscures the success of many ACOs in reducing utilization, Spight said.

The use of prospective assignment of beneficiaries can compound impacts from risk adjustment.

“Most of their performance is hiding what they’ve actually gotten done because of how the assignment works and how the risk adjustment is applied,” Spight said.

HFMA RESOURCE LIBRARY

Patient financial engagement is more challenging than ever – and more critical. With patient responsibility as a percentage of revenue on the rise, providers have seen their billing-related costs and accounts receivable levels increase. If increasing collection yield and reducing costs are a priority for your organization, the metrics outlined in this presentation will provide the framework you need to understand what’s working and what’s not, in order to guide your overall patient financial engagement initiatives and optimize results.

No two patients are the same. Each has a very personal healthcare experience, and each has distinct financial needs and preferences that have an impact on how, when and if they chose to pay their healthcare bill. It’s no longer effective to apply static billing techniques to solve the complex challenge of collecting balances from patients. The need to tailor financial conversations and payment options to individual needs and preferences is critical. This presentation provides 10 recommendations that will not only help you improve payment performance through a more tailored approach, but take control of rising collection costs.

This white paper, written by Apex Vice President of Solutions and Services, Carrie Romandine, discusses the importance of patient segmentation and messaging specifically related to the patient revenue cycle. Applying strategic messaging that is tailored to each patient type will not only better educate consumers on payment options specific to their billing needs, but it will maximize the amount collected before sending to collections. Further, targeted messaging should be applied across all points of patient interaction (i.e. point of service, customer service, patient statements) and analyzed regularly for maximized results.

This white paper, written by Apex President Patrick Maurer, discusses methods to increase patient adoption of online payments. Providers are now seeking ways to incrementally collect more payments due from patients as well as speeding up the rate of collections. This white paper shows why patient-centric approaches to online payment portals are important complements to traditional provider-centric approaches.

Increased electronic engagement between healthcare providers and patients provides significant opportunities for improving revenue cycle metrics and encouraging patients to access EHRs. This article, written by Apex Founder and CEO Brian Kueppers, explores a number of strategies to create synergy between patient billing, online payment portals and electronic health record (EHR) software to realize a high ROI in speed to payment, patient satisfaction and portal adoption for meaningful use.

Faced with a rising tide of bad debt, a large Southeastern healthcare system was seeing a sharp decline in net patient revenues. The need to improve collections was dire. By integrating critical tools and processes, the health system was able to increase online payments and improve its financial position. Taking a holistic approach increased overall collection yield by 10% while costs came down because the number of statements sent to patients fell by 10%, which equated to a $1.3M annualized improvement in patient cash over a six-month period. This case study explains how.

To maintain fiscal fitness and boost patient satisfaction and loyalty, healthcare providers need visibility into when and how much they will be paid–by whom–and the ability to better navigate obstacles to payment. They need payment clarity. This whitepaper illuminates this concept that is winning fans at forward-thinking hospitals.

Financial services staff are always looking for ways to improve the verification, billing and collections processes, and Munson Healthcare is no different. Read about how they streamlined the billing process to produce cleaner bills on the front end and helped financial services staff collect more than $1 million in additional upfront annual revenue in one year.

Effective revenue cycle management can be a challenge for any hospital, but for smaller providers it is even tougher. Read how Wallace Thomson identified unreimbursed procedures, streamlined claims management, and improved its ability to determine charity eligibility.

Before launching an energy-efficiency initiative, it’s important to build a solid business case and understand the funding options and potential incentives that are available. Healthcare leaders should consider taking the steps outlined in the whitepaper to ease the process of gaining approval, piloting, implementing, and supporting sustainability projects. You will find that investing in sustainability and energy efficiency helps hospitals add cash to their bottom line. Discover how hospitals and health systems have various options for funding energy-efficient and renewable-energy initiatives, depending on their current financial structure and strategy.

Health care is a dynamic mergers and acquisitions market with numerous hospitals and health systems contemplating or pursuing formal arrangements with other entities. These relationships often pose a strategic benefit, such as enhancing competencies across the continuum, facilitating economies of scale, or giving the participants a competitive advantage in a crowded market. Underpinning any profitable acquisition is a robust capital planning strategy that ensures an organization reserves sufficient funds and efficiently onboards partners that advance the enterprise mission and values.

The success of healthcare mergers, acquisitions, and other affiliations is predicated in part on available capital, and the need for and sources of funding are considerations present throughout the partnering process, from choosing a partner to evaluating an arrangement’s capital needs to selecting an integration model to finding the right money source to finance the deal. This whitepaper offers several strategies that health system leaders have used to assess and manage capital needs for their growing networks.

Announcements from several commercial payers and the Centers for Medicare and Medicaid Services (CMS) early in 2015 around increased efforts to form value-based contracts with providers seemed to point to an impending rise in risk-based contracting. Rather than wait for disruption from the outside in, health care providers are now making inroads on collaborating with payers on various risk-based contracting models to increase the value of health care from within.

Yuma Regional Medical Center (YRMC) is a not-for-profit hospital serving a population of roughly 200,000 in Yuma and the surrounding communities.
Before becoming a ZirMed client, Yuma was attempting to manually monitor hundreds of thousands of charges which led to significant charge capture leakage. Learn how Yuma & ZirMed worked together to address underlying collections issues at the front end, thus increasing Yuma’s overall bottom line.

Kindred Hospital Rehabilitation Services works with partners to audit the market and the facility’s role in that market to identify opportunities for improvement. This approach leads to successes; Kindred’s clinical rehab and management expertise complements our partners’ strengths. Every facility and challenge is unique, and requires a full objective analysis.

Qualified coders are getting harder to come by, and even the most seasoned professional can struggle with the complexity of ICD-10. This 5-Minute White Paper Briefing explains how partnerships can help improve coding and other key RCM operations potentially at a cost savings.

The point of managing your revenue cycle isn’t just to improve revenue and cash flow. It’s to do those things effectively by consistently following best practices— while spending as little time, money, and energy on them as possible.

The reasons claims are denied are so varied that managing denials can feel like chasing a thousand different tails. This situation is not surprising given that a hypothetical denial rate of just 5 percent translates to tens of thousands of denied claims per year for large hospitals—where real‐world denial rates often range from 12 to 22 percent. Read about how predictive modeling can detect meaningful correlations across claims denials data.

Emergency Mobile Health Care (EMHC) was founded to be and remains an exclusively locally owned and operated emergency medical service organization; today EMHC serves a population of more than a million people in and around Memphis, answering 75,000 calls each year.

Since the Physician Quality Reporting Initiative (PQRI) introduction, CMS has paid more than $100 million in bonus payments to participants. However, these bonuses ended in 2015; providers who successfully meet the reporting requirements in 2016 will avoid the 2% negative payment adjustment in 2018, so now is the time to act! Included in this whitepaper are implications of increasing patient responsibility, collections best practices, and collections and internal control solutions.

Getting paid what your physician deserves—that’s the goal of every biller. Yet even for the best billers, achieving that success can be elusive when denials stand in the way of success, presenting challenges at every turn. Denials aren’t going away, but you can learn techniques to manage and even prevent them.Join practice management expert Elizabeth W. Woodcock, MBA, FACMPE, CPC, to: Discover methods to translate denial data into business intelligence to improve your bottom line, determine staff productivity benchmarks for billers, and recognize common mistakes in denial management.

Read more about factors contributing to the changes in the post-acute marketplace and what it means for manufacturers, physicians, clinicians, patients, and post-acute facilities as they anticipate the transition to the second curve.

HSG helped the physicians and executives of St. Claire Regional in Morehead, Kentucky, define their shared vision for how the group would evolve over the next decade. As well as, develop the strategic and operational priorities which refocused and accelerated the group’s evolution.

The client was a nine-hospital health system with 14 clinics serving communities in a multi-state market with very limited access to care, poor economic conditions, high unemployment, and a heavy Medicare/Medicaid/uninsured payer mix. In most of these communities, the system was the sole source of care.
Though the clinics were of substantial size (they employed 98 physicians) and comprised of multiple specialists, the physicians functioned as individuals and the practices lacked any real group culture.

Clinical integration can be expensive, but it doesn’t have to be, as this four-step road map for developing a CIN proves. Does it have to cost millions to initiate a clinical integration strategy?
Contrary to popular belief, we have clients who have generated substantial shared savings and a significant ROI over time, without massive investments. Yes, some financial capital is required for resources the CIN providers can’t bring to the table themselves. But the size of that investment can be miniscule relative to the value it produces: improved outcomes and documentation for payers.

Today’s concerns about physician compensation are the result of the changing healthcare environment. The transition to value is slow, but finally becoming a reality. Proactive hospitals want to ensure that provider incentives are properly aligned with ever-increasing value-based demands.
This report focuses on the three big questions HSG receives about adding value to physician compensation; Why are organizations redesigning their provider compensation plans? What elements and parameters must be part of successful compensation plans? How are organizations implementing compensation changes?

Revenue Cycle Management has become an even more complex issue with declining reimbursements, implementation of Electronic Health Records, evolving local carrier determinations (LCD), and payer credentialing [The emphasis on healthcare fraud, abuse and compliance has increased the importance of accuracy of data reporting and claims filing).
The efficiency of a medical practice’s billing operations has critical impact on the financial performance. In many cases, patient billings are the primary revenue source that pays staff salaries, provider compensation and overhead operating cost. Inefficiencies or inaccurate billing will contribute to operating losses.

This publication identifies and outlines the necessary characteristics of a fully-functioning clinically integrated network (CIN). What it doesn’t do is detail how hospitals and providers can participate in the value-based care environment during the development process.
One common misconception is that the CIN can’t do anything significant until it has obtained the FTC’s “clinically integrated” stamp of approval. While the network must satisfy the FTC’s definition of clinical integration before single signature contracting for FFS rates and contracts can legally start, hospitals and providers can enjoy three key benefits during the development process.

Nearly half of all Medicare beneficiaries treated in the hospital will need post-acute care services after discharge. For these patients, a stay in an inpatient rehabilitation facility, skilled nursing facility or other post-acute care setting comes between hospital and home.

With the proper process, tools, and feedback mechanisms in place, budgeting can be a valuable exercise for organizations while helping hold organizational leaders accountable. Having a proper monthly variance review process is one of the most critical factors in creating a more efficient and accurate budget. Monthly variance reporting puts parameters around what is to be expected during the upcoming budget entry process.

Managing the cost of patient care is the top strategic priority of most hospital CFOs today. As healthcare shifts to more data-driven decision making, having clear visibility into key volume, cost and profitability measures across clinical service lines is becoming increasingly important for both long-range and tactical planning activities. In turn, the cost accounting function in healthcare provider organizations is becoming an increasingly important and strategic function. This whitepaper includes five strategies for efficient and accurate cost accounting and service line analytics and keys to overcoming the associated challenges.